Capital values set to fall in 2008 as the boom finally ends (Q2 07)

This edition of the Analyst marks a distinct change in our expectations for the commercial property market. We have been warning about the upside risks to interest rates and thus the downside risks to commercial property prices for some time. But, with the Bank of England increasingly worried about the need to address building inflation pressures, those risks are now our central view. In other words, we no longer expect the commercial property boom to end in a soft landing. Rather, we expect capital values to fall in 2008, 2009 and 2010.